Fast Food Franchise Wendy's Closing 300 U.S. Locations

Wendy’s has announced that it will shutter a mid-single-digit percentage of its U.S. locations (roughly 200-300 stores) in the near term as part of a strategic effort to optimize its system, curb losses from under-performing restaurants and refocus investment on stronger units. The burger franchise Wendy's is currently undertaking a strategic and widespread reduction of its physical footprint in the United States, with plans to close hundreds of underperforming locations through 2026.  This action is not a sign of imminent collapse, but rather a calculated maneuver, dubbed a "turnaround plan" by company executives, designed to improve overall financial health and competitiveness. 

A key contributor is that many of the restaurants targeted are “consistently underperforming,” generating revenue and margins well below the system average. For example, some locations produce annual revenues around $1.1 million or less—just over half the company average. Additionally, many of these stores are in older sites with outdated facilities, weaker drive-thru service or less favorable locations, making them a drag on the brand and franchisee financial performance.

Another major reason, traffic is falling at U.S. stores. Wendy’s reported same-store sales drops of about 4 % in some recent quarters. At the same time, inflation and rising costs have squeezed lower-income consumers, a key segment for fast-food  making them more selective about dining out. Because of these dynamics, the company is facing both weaker demand and higher operating costs (food, labor) in many locations.

Wendy’s leadership describes the closures as part of a broader “system optimization” approach. Rather than simply shutting stores, some locations will be transferred to better operators, remodeled with upgraded technology, or replaced with new-build units in stronger markets. By pruning weaker units, the goal is to free up capital and focus resources on locations that can drive higher unit volumes, improved experience (e.g., remodeled stores, stronger drive-thru operations) and better customer perception of the brand. 

In summary, Wendy’s isn’t closing hundreds of restaurants because it’s exiting the U.S. market, but because it sees the need to sharpen its footprint, divest units that drag performance, and reinvest in better-positioned locations. With weaker traffic, heightened cost pressures and an increasingly competitive fast-food landscape, the chain is taking a proactive step to rebuild a stronger core rather than sustaining all stores equally. The closures signal a strategic refocus: fewer under-performers, stronger growth potential for the remaining units, and a better aligned structure for future expansion.